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Fitch confirms the long-term  rating of Transelectrica at ‘BBB’ with stable perspectives


Fitch Ratings confirmed at ‘BBB’ the long-term  rating for the national electricity transporter Transelectrica with stable  perspective,show a press release of financial evaluation.

The rating reflects the profile of individual creditation of the company but Fitch warns that any improvement is limited by the connections with Romania( rating ‘BBB minus with stable perspective) which owns 58.7 % of Transeletrica.

The confirmation of the rating reflects the conservative balance and the gains of Transelectrica supported by the regulations of the country regarding the transport of electricity,the present legal framework being in power until the middle of 2019. The present regulations stimulate the investments in networks,with funds of  over three billion lei planned until 2023,which could have as result the growth of the degree of indebtedness,says Fitch.

According to the agency of financial evaluation the  long-term rating of Transelectrica is stopped at ‘BBB’ with a step over that of Romania due to the connections of the company with the state. Fitch estimates  that a positive action of rating could take place if the creditation profile of Transelectrica improves and the sovereign rating of Romania is revised upwards.

In exchange,the   rating can be worsened if the connections with the government become more powerful if the sovereign rating of Romania  is revised downwards or if the regulations change significantly regarding the transport of electricity which could affect the profitability of Transelectrica.

According to Fitch, the main factors which could,individually or collectively lead to the improvement of the rating of Romania are: the reduction of the risks of macroeconomic instability, the implementation of the fiscal consolidation which improves the long-term journey of the public debt as percentage of the GDP and  the sustainable improvement of foreign finances.

Similarly, the main factors which could individually or collectively lead to the worsening of the rating of Romania are:the fiscal deficits persistently up which lead to a rapid growth of the governmental debt as percentage of GDP,an over-heating of the economy or ‘ forced landing’ which  undermines the macroeconomic stability.

Transelectrica,the operator of transport and system  in electricity showed a net profit of 98,01 million lei for the first six months of this year, similarly to that of the one in the same period of last year, when it was 98.38 million lei.At the same time,the total income was dropping with 29% from 1,739 billion lei to 1.233 billion lei. The total expenses were very less than 30% from 1.610 billion lei to 1.121 billion lei.